The ShinesRooms.com Provides Stock Research on Valero Energy Corporation and Marathon Oil Corporation
New York City, New York -- Oil Refining stocks are performing well despite weakness in oil and energy prices. Valero Energy has been hitting new 52-week high lately, mainly on the back of solid quarterly numbers. The sector is also going through restructuring phase as the companies are looking to augment their core competencies by getting out of non-essential business activities and infusing their resources into their profitable segments. Overall, the sector seems to be on rebound and the stocks are set to provide good value to their investors.
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Valero Energy Corporation is on the upswing and the stock hit a 52-week high recently. The oil refiner and marketer reported good quarterly results as it reported its non-GAAP EPS at $1.88 per share while its operating income stood at $1.6 billion. Its revenue was reported at $34.7 billion.
Valero is likely to benefit from its new hydrocracker at the Port Arthur refinery. It is also looking to streamline its business operations by spinning off a part of its business. The company had initially announced the plan in July last year. However, it is expected to be implemented later this year. Under this plan, the company would be spinning off its retail business operations. Valero generates about $500 million in annual revenue from its retail business.
Despite its recent price gains, Valero still trades at Price/Earnings ratio of 12.15, making it an inexpensive stock to own. Increase in domestic demand for oil spells well for Valero as it may help the company in boosting its margins. Refiners’ stocks are also set to gain from increased production demand. Valero plans to tap premium overseas markets as well, which will not only help the company to diversify itself but also to command higher margins.
On the other hand, Marathon Oil recently declared a dividend of 17 cents per share. The company is mainly invested in Exploration and Production, which accounts for about 90 percent of its revenue. Yesterday, the oil and gas explorer and producer reported its fourth quarter earnings at $0.55 per share in comparison to $0.78 per share seen in the corresponding quarter of last year. Whilst exploration costs ate into profits revenue inched up 11.32 percent year-over-year to $4.24 billion.
Marathon Oil has deep interest in emerging shale play. It plans to expand its hold in the segment and may invest as much as $1.5 billion to develop its operations in Eagle Ford Shale. The company is also planning to curtail its costs and streamline its business by divesting its non-core business. Marathon Oil may sell off $1.5 billion to $3 billion of its non-essential assets. It is also planning to diversify outside of the U.S. and is active in Kurdistan and Poland. Marathon Oil stock is also relatively cheap as it trades at Price/Earnings of about 13.19.
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